Kelly Guzzo, PLC Files Class Action Lawsuit Against Path Lending for Alleged Predatory Lending and Violation of State Interest Rate Laws

Kelly Guzzo, PLC Files Class Action Lawsuit Against Path Lending for Alleged Predatory Lending and Violation of State Interest Rate Laws

On January 28, 2025, Kelly Guzzo, PLC filed a class action lawsuit against Coho Financial d/b/a (“Path Lending”), which holds itself to be a tribal lending entity owned and operated by the Guidiville Band of Pomo Indians. This lawsuit challenges the legality of Path Lending’s high-interest loans and seeks damages and declaratory relief against co-conspirators participating in this illegal predatory lending scheme.

As detailed in the complaint, the plaintiff applied for loans from Path Lending—all for less than $1,000 each—and was charged Annual Percentage Rates of 675.27%, 793.08%, 790.79%, 906.97%, and 813.86%, respectively. Plaintiff alleges that this high-interest rate loan from Path Lending constitutes predatory lending and violates state usury laws as well as the Racketeer Influenced and Corrupt Organizations Act (“RICO”). Plaintiff further alleges that Path Lending is a front for a non-tribal payday lender wishing to use the Guidiville Band of Pomo Indians to circumvent state legal prohibitions on usurious lending.

Many companies, like Path Lending, have attempted to use the tribal lending model to provide cover for their high-interest loans. In this scheme, a payday lender recruits a Native American tribe to establish a tribal business entity to function as the nominal, originating lender to create a tribal veneer for the business. Although the loan contracts and websites claim that the tribe owns and operates the lending entity, often it is a non-tribal payday lender who actually operates the lending business, including the marketing, underwriting, origination, financing, and collection of loans.

State usury laws protect consumers from these high-interest, predatory lending products—even if they are supposedly made by a tribal lending entity. For example, absent certain exceptions, Virginia law prohibits the payment of interest on loan at a rate that exceeds 12% per year. Likewise, California law prohibits the payment of interest on a loan that exceeds 12% per year

Over the past decade, Kelly Guzzo, PLC has represented consumers against individuals and businesses engaged in predatory lending, including those using the tribal lending model. If you have taken out a high interest loan with Path Lending, we can assist you. There is no out-of-pocket cost for these services, and we only recover if you do. Please contact us if you have received a high-interest loan.